An Idiot's Guide To Buying NFTs
For aspiring idiots who want to make money (maybe) on JPEGs on Solana
For some reason, people ask me how they should go about buying NFTs on Solana as if I have any fucking clue on how to do that properly lol. I have made so many bad trades that are still underwater, but heck — having a Boogle for my pfp I guess means people might actually read this. I’m not an NFT “Trader” per say, as all my profit has gotten re-invested in Gobi Labs, minus living costs (I have a low burn), but if I was a pure PNL trader, my profits are probably in the 1mil USD range over the last 14 months.
Full disclosure: I have done 1 mega profitable trade, which were about 30 DeGods bought around 5 SOL floor and have sold a lot of them for between 300-3.6k SOL each at about a 69x profit at the local top, multiple times. The others have been smaller wins, or still are underwater. I don’t sell at a loss.
I treat buying NFTs as I do poker (something else I am very bad at). You must first decide what type of poker player you are, before you can be successful at it. Do you abide by GOT? Do you have a tight range? How aggressive are you against 3 or 4 bets? Do you play out of position? Etc. In other words, know thyself before you start.
In our world, the key factors about you that you have to decide on imo are size, time & profit.
Size: Are you looking to buy 1-2 pieces at a time, or are you able (and comfortable) to sweep large volumes?
Time: Are you looking to flip within hours, time local bottoms and sell on the next timed pump, or are you comfortable holding for extended market downturns?
Profit: Are you (happy) to make a 10% profit, or be able to ride it until the wheels fall off? How risk averse are you at local tops, do you have a multiplier in mind that you are content with ?
For me personally, I’m very comfortable with size. I prefer to buy at least 10x at a time, if not 20x or more. My bets are concentrated. Time wise, I am uber patient. I held my DeGods for at least 6 months, my apes I’ve had for 12 months now, Monkes between 6-9 months. Even my Bokus (bought at 180) I’ve held for 5 months now. There are others like Gaius & Big Brain who are much more patient than me though. Profit? I aim for at least 3-4x of my initial bet, ideally more. I’m not interested in short term gains, I prefer home-runs or at least ground-rule doubles. I know myself, therefore I am able to craft a strategy around my foundation. Granted, it has taken me 14 months of eating, breathing and living this life to formulate my foundation & strategy.
I hold 35 cets, most were NOT bought at the bottom. Average price is probably around 45 SOL. Do I care? No. I’m not in a rush to sell them, and don’t care about the margins (I’m a terrible trader, I know). Now that I have my foundation, it’s time to talk about how I decide to actually select for purchase.
I look for 3 things when buying a project, which once again I will tend to do w/size, have an extended period I’m comfortable holding, and am looking for 3-4x return at least. This does not apply to NFTs I own for love, passion or to support friends (especially the ones who buy me Korean BBQ).
The 3 things are: Art, Community & Short Term Execution Viability Expectation (STEVE)
Art: I think art matters, because it forms long term holder attachment, one of the key variables in success. Art is subjective, but quality is not. Quality can be measured by the amount of time the team & artist has spent on the art. You might not like it, but you can tell if it was rushed. Good art pfps are done over time, even if they’re pixel. Critters is a good recent example.
Community: What matters in the community for me are the “new” people, and the relationships that are made. This is what made DeGods special, and with it some of the other major projects like DAA or SMB. What I don’t want to see is the same people who I’ve seen in other projects. If a project can create a new community, and bring its early adopters along for the ride while making genuine relationships & attachments with each other, it’s a win for me.
STEVE: This is a mouthful, I know. So let me explain what I mean when I say Short Term Execution Viability Expectation. TLDR: Does what they want to do make sense over the next 2-3 months, is it needed and can they pull it off?
Development, operations & creating is hard. It’s also not time-sensitive, as in code takes time. Art takes time. Making a fucking merch business, takes time. If the team isn’t able to demonstrate that they have a “realistic” plan to achieve a specific vision in the short run, I’m out. I’m okay w/delays, I’m okay w/long term grand ideas, but what I care about is short term execution viability.
I own 0 Okay Bears, I have owned a max of 5 at one point and sold them. Their STEVE was what turned me off in the end, despite excelling at art and community. The inability to do short term execution on wristbands, or even staking was a red flag for me personally (not fudding). Even at this point, I don’t know what the STEVE is, or how viable it is — otherwise I’d pick up a giant bag.
Alright, that’s it for today. Thank you for reading till now. If you have any questions, please feel free to DM me on Twitter and make sure to subscribe to this Substack to receive more useless information like this article, as well as all the latest updates about Gobi Labs. Remember, always start by deciding what kind of NFT trader you want to be first before deciding what to buy.